IT Jobs 'Stable' Despite Merger-Related Layoffs

Despite layoffs caused by corporate mergers, the technology job space remained relatively stable for September. But layoffs for the year are still up compared to 2004.


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Despite layoffs caused by corporate mergers, the technology job space remained relatively stable for September.

In the overall American economy, September job cuts were 33 percent lower than a year ago -- with 71,836 layoffs compared to 107,863, according to analysis from Challenger, Gray & Christmas, a global outplacement firm based in Chicago. With two consecutive months of lower job cuts, the third quarter saw the lowest downsizing since the second quarter of 2004.

However, the tech industry took some tough hits because of corporate mergers.

''We have seen a pretty strong economy generally for merger and acquisition activity,'' says John Challenger, chief executive officer of Challenger, Gray & Christmas. ''When you see that kind of consolidation, you know that most companies don't need duplicate headquarters, so layoffs will follow.''

Challenger reports that more than one in seven job cuts announced this year resulted from a merger.

Right now, the computer industry is showing more job cuts than in all of 2004. Challenger, Gray & Christmas reports that there have been 61,907 layoffs in the computer industry so far this year, compared to 48,917 in all of 2004.

''It looked like layoffs were trending upwards, but in August and September they took a breather,'' explains Challenger. ''We're still over 8 percent ahead of last year's pace for the first nine months, but the last two months have been relatively flat and benign. I think that hopefully is a good sign. I'm a little concerned that it's just a breather and a wait-and-see. I do feel like the economy has been slowing and slowing.''

More Spending Means More Jobs

Scot Melland, president and CEO of Dice Inc., an online IT recruiting company, says tech spending is picking up and that will influence the job sector.

''Even with the higher oil prices and the hurricanes, tech spending still has a lot of momentum and that's reflected in the job market, as well,'' he says. ''There were some layoffs -- PeopleSoft and Xerox -- but we're still seeing a lot of new hiring. The one thing that continues to be promising for tech professionals is you see the growth of full-time positions is higher than the growth for consulting positions. Companies are confident enough going forward that they're bringing on people full time.''

According to Dice's numbers for September, the number of 'contract' positions being advertised on the job site was 31,310, compared to 50,603 for full-time positions.

Dice also shows:

  • The average salary is $67,900;
  • The average salary for a full-time position is $64,600, compared to the average salary of $87,100 for a contract position;
  • The top skill being sought on Dice is C and C++ programmers;
  • The number of available tech jobs posted for September was 76,608;
  • The top three metro areas are: New York/New Jersey, Washington D.C., and Silicon Valley.

    Melland also notes that he sees a good omen in the fact that there's growing demand for project managers.

    ''It's telling me that companies and government agencies are rolling out big projects,'' says Melland. ''Irregardless of whether the work is being done inhouse or is being farmed out to an outsourcer, they need a qualified project manager. It's also an early indicator of hiring to come because you usually want to bring on the project manager first. It's another good sign.''

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